The media is having another kick-around of the old idea that Scotland, if independent, would be required under EU rules to join the Euro. As the Commission’s website confirms, the only EU members with an opt-out are Denmark and the United Kingdom. Even Sweden must join, in theory, when the time is right, and they’re probably not yearning to do so at the moment.
Any other existing EU members not in the Euro have to join ERM II and fulfil convergence criteria, which presumably right now means “is your economy nosediving and are your bonds not selling very well?” Sweden appears to have avoided this risk by deciding not even to join ERM II yet. This neat trick means they are not officially beginning to converge with the Eurozone, so can stay out. In practice it appears that new members could probably pull off the same trick, akin to Gordon Brown’s famous five tests, but despite reading the whole of the Maastricht and Amsterdam Treaties over the weekend, I’m really no clearer about that.
But that may not matter. So we’ll start again.
The argument is this: an independent Scotland would be either be outside the EU, shivering in the cold, or we’d be a new member, obligated to join the Euro just as putative future EU member states like Croatia would have to. But assume the referendum results in independence – why would Scotland have a formally different status to “England, Wales and Northern Ireland”? Let’s do a few implausible thought exercises.
Perhaps it’s because it would be Scotland’s decision to “leave”. Is it down to who takes the decisive step? Imagine the Clarksonite argument that the Scots are a drain on the exchequer triumphed at Westminster, and Dave decided to cut us off, metaphorically. Would we be forced into the Euro in those circumstances? Or if EW&NI were the ones who were seen to have initiated the breakup, not us, would therefore they be required to join the Euro instead? Both are absurd prospects.
Perhaps it’s a question of scale? Just because the bulk of the UK’s population would remain in EW&NI, does that make them the only successor state? There is some precedence for scale, notably when the USSR broke up and the Russian Federation got to keep the embassies, but the consequences of that decision for the other former Soviet republics weren’t as radical as a requirement to join a currency union. But still, that can’t be right. Imagine an EU member state, let’s call it Belgium, divided relatively amicably into two equal parts. Would only one of Flanders and Wallonia be left the successor state to Belgium, according to which was marginally bigger in population terms? No way, which is what makes this legal advice ridiculous.
Another option is that both halves could decide not to take on the rights and responsibilities. When Czechoslovakia went through its Velvet Divorce, neither country sought recognition as the sole successor state, and both were treated as new UN entrants, yet both remained parties to all treaties signed by their predecessor state. But that’s not going to happen, especially in this case.
Fortunately, we don’t need to play these games. In practice, the question of successor states is determined by the 1978 Vienna Convention. Colonies achieving independence are not bound by the treaties of their former colonial masters, whereas in “cases of separation of parts of a state”, all new states remain so bound (or in this case, free). Only the wilder fringes of cybernat-dom regard independence as the last act of decolonising the British Empire, so a newly independent Scotland would be covered by existing treaties, just as EW&NI would be. Thankfully.
And so the First Minister’s desire for independence and his desire for us to join the Euro can at least be dealt with separately by those of us who agree only with the first objective.